ANZ has ‘sacrificed short-term revenue growth’. Picture: David Mariuz/AAP
ANZ has ‘sacrificed short-term revenue growth’. Picture: David Mariuz/AAP

ANZ profit falls five per cent amid ‘housing headwinds’

ANZ has blamed "strong headwinds" in the housing market and the fallout from the banking royal commission for a 5 per cent drop in full-year cash profit to $6.487 billion.

Cash profit including discontinued operations fell 16 per cent to $5.805 billion for the year ended September 30, while statutory profit was flat at $6.4 billion.

ANZ said it had taken action to simplify the business and cut costs in the wake of the commission, having earlier announced $374 million in refunds and remediation and $55 million in legal costs.

"While there was much to be pleased about this year, we accept the significant community concern as a result of our failures highlighted by the Royal Commission has impacted our standing in the community," ANZ chief executive Shayne Elliott said in a statement.

"This was a factor in the decision to reduce variable remuneration paid to staff this year across the bank by $124 million. We are also undertaking the urgent work required to fix the failures that have been highlighted by the Commission and further increased our focus on conduct issues."

Mr Elliott said as housing growth slowed and borrowing capacity reduced, the bank had continued its "disciplined approach" by "focusing on customers who want to buy and own their own home".

"While this meant we sacrificed short-term revenue growth and higher margins in Australia, particularly in the investor and interest-only segments, it was the right thing to do for shareholders," he said.

"We expect the tough revenue growth environment in retail banking in Australia to continue for the foreseeable future, however we are well positioned to take advantage of growth opportunities in institutional, Asia and New Zealand."

ANZ's bad debts fell by 9 basis points to 0.12 per cent of total loans while new impaired assets were 34 per cent lower than 2017 at $2.108 billion.

"The lowest credit losses in a generation have been driven by our decision to change the composition of our loan book, the sale of our retail business in Asia, together with the run-down of our mid-market commercial business in Asia and a relatively benign credit environment," Mr Elliott said.

The bank will pay a final, fully franked dividend of 80 cents per share, bringing the full-year dividend to $1.60 per share.

 

frank.chung@news.com.au


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